Correlation Between 26884ABH5 and Ainsworth Game

Can any of the company-specific risk be diversified away by investing in both 26884ABH5 and Ainsworth Game at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining 26884ABH5 and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ERP OPER LTD and Ainsworth Game Technology, you can compare the effects of market volatilities on 26884ABH5 and Ainsworth Game and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in 26884ABH5 with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26884ABH5 and Ainsworth Game.

Diversification Opportunities for 26884ABH5 and Ainsworth Game

-0.45

Correlation Coefficient

26884ABH5  Ainsworth Game

Very good diversification

The 3 months correlation between 26884ABH5 and Ainsworth is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ERP OPER LTD and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology and 26884ABH5 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ERP OPER LTD are associated (or correlated) with Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of 26884ABH5 i.e., 26884ABH5 and Ainsworth Game go up and down completely randomly.

Pair Corralation between 26884ABH5 and Ainsworth Game

Assuming the 90 days trading horizon ERP OPER LTD is expected to generate 0.25 times more return on investment than Ainsworth Game. However, ERP OPER LTD is 3.96 times less risky than Ainsworth Game. It trades about 0.3 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about 0.06 per unit of risk. If you would invest  7,917  in ERP OPER LTD on September 12, 2024 and sell it today you would earn a total of  323.00  from holding ERP OPER LTD or generate 4.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	54.55%
Values	Daily Returns

ERP OPER LTD  vs.  Ainsworth Game Technology

ERP OPER LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ERP OPER LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26884ABH5 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Ainsworth Game Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ainsworth Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with 26884ABH5 and Ainsworth Game

The main advantage of trading using opposite 26884ABH5 and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26884ABH5 position performs unexpectedly, Ainsworth Game can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ainsworth Game will offset losses from the drop in Ainsworth Game's long position.

The idea behind ERP OPER LTD and Ainsworth Game Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.